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Establishing a business in Asia - What I wish I knew a year ago

With puny or non-existent economic growth, western countries are tough places to do business. Asia, on the other hand, is where the real money is and UK publishers are heading over there in search of growth. The main challenge facing them, writes Katrina Andrews, is bridging the cultural divide between east and west.

By Katrina Andrews

We all know Asia is experiencing rapid economic growth, in stark contrast to most western countries, but this brings its own set of challenges. With this regional momentum in mind, and following a trickle of sales, it was in January 2010 that I, together with the Australian team of a UK head quartered research and training business, began to really take notice of the region. However Asia is vast and culturally diverse, and once I’d started to find out more about the region through extensive networking, I discovered that although Asia has a population of approximately 1.7 billion, that by no means guarantee’s an avalanche of sales…

Over the next 18 months, the team devised our 'Asia Development Strategy' that focused on:

* Developing the Asian database

* Establishing long-term, high-value relationships

* Offering our strongest training program in our strongest markets: Hong Kong and Singapore

By October 2010, we were ready to establish a presence within the region and by February 2011 we had a fully fledged office, based in Bangkok, Thailand. From October to the present date, I have invested heavily in understanding the region and my findings form the basis for this article. It's basically 'what I wish I knew a year a go'. These are my ’top tips’ and common pitfalls to avoid. Enjoy!


When embarking on a new business venture in Asia, remember that infrastructure (or lack of it) can cause a business to go under. One of the biggest considerations is: how can your customers purchase your products? Sounds simple enough, but consider:

* Different regions throughout Asia have heightened security around credit card processing, especially China, which can really cripple sales processing if you have not done your due diligence. We found an exceptionally high number of credit cards declined – which slowed down our accounts receivable for events, subscription payments and so on.

* India as a region struggles to pay in foreign currencies (and most employees don’t have corporate credit cards), but how many currencies do you allow for processing? Does your current provider allow you to process in Singaporean, Hong Kong dollars or Yen?

* Cash is a common payment method in Asia (but not so common in the West). What is your policy on accepting cash? Make sure your team are aware of this policy.

Here are some further thoughts on infrastructure…

* Tax regulations: Depending on the countries you sell into, each may have different tax regulations. Make sure you understand the tax implications (and how to add it to each sale) because if not, you’ll be paying the tax (and in Singapore it’s 20% per sale).

* Contracts: If you’re planning on running an event, venues generally ask for a higher level of deposit – most 50%, however some 100%. This makes it difficult to 'trial' events throughout the region.

* Business registration / set-up: Most business registrations in Asia take between 6-12 weeks, which should be factored into your planning process (although in Hong Kong the process can be slightly quicker). Don’t forget, once you’ve registered, you’ll still need to register for corporation tax and social security (for employees). Then there’s bank accounts to set up, accounting procedures, etc.

Resources – what do you need? And how do you find it?

Once you've checked off your infrastructure due diligence, you can now move ahead to resourcing within the region. A couple of the most interesting (and difficult) tasks I encountered while setting up office in Asia were office space and recruitment. If you haven't managed staff outside of a western culture before, I'd really encourage attending 'cultural training'. Communication misunderstandings are the easiest way to slow down the progression of your business, and it's important to remember you are operating in a diverse and widely different culture to the west, which will impact on incentives you offer to staff, targets, brainstorming sessions and general interaction.

I'll never forget in my first week, hearing from an associate who had also just moved to Thailand, who talked about how baffled they were that a finance administrator had resigned from a seemingly great role with a good salary working for a Fortune 500 business. When a counter offer was made with a salary increase and additional benefits, the reply came that the employee had spoken with their family and made the decision to leave. Once this associate had completed cultural training and on further investigation, it became apparent that the family of the finance administrator thought she was working too long hours and it was impacting on family life – so increased salary or benefits played no role in her decision. It's important to understand the drivers of motivation for your employees – as generally they are different to what you've previously understood them to be.

When looking for office space, there are a few points to be aware of. As part of your business registration, you’ll need to register the business to an address, making it difficult, as no-one wants to take office space without the comfort of knowing the business has had its license approved! However, most office spaces will allow you to sign a lease, on the condition that your business registration comes through (with no penalty if it doesn’t). Although beware if you’re planning to take a short-term lease, but want to register your business to an address, as the landlord will ask for a 12-month rental agreement. You can do this but just make sure to add a 6-month break clause.


The benefits of recruiting in Asia are obvious: labour is cheaper. For example, an events manager can be hired 60% cheaper than the average UK salary for this type of role. However I've heard many horror stories, of (once hired) staff refusing to travel, nationals 'ganging up” against the western manager or very short contracts where a local applicant leaves after finding their western boss too abrasive. Personally I believe you can head off a lot of these issues in the recruitment period by outlining the role (and how it differs to what they may have done previously) and asking probing questions (some good questions might be: 'I'm very picky and demanding, how do you think you'd handle being managed by a westerner? Have you discussed with your family the travel involved in this role? Does it concern them?). Obviously the last thing you want is to go through the recruitment and induction period only to find out that they're not the right fit. Other points to consider:

* Expats vs nationals: all business registrations will require you to hire an element of nationals within the business.

* Using a local agency helps avoid language barriers. However, organisations like the British Council are also helpful for referrals.

* The value of the family unit in Asia plays an important part in recruitment. If your role requires an element of travel, it’s always vital to be very upfront about that and for junior to mid-level roles, ask if this has been discussed with applicants’ families.

* Setting clear expectations is essential. Asia has a largely hierarchical culture, so if you want a team that can 'brainstorm' together, you're going to have to work hard to foster that kind of culture, don't just expect it.

Now to making money… Sales and marketing!

Relationships matter and Asians are savvy networkers. So if you’re expecting to establish large corporate clients, face-to-face meetings are vital (which means you have to travel to them). When you do eventually get to the meeting, it may sound basic, but name pronunciation can be difficult so it’s acceptable to ask how they’d like to be addressed, as many have western nicknames that they may prefer you to use.

I'd also suggest considering:

* Language: probably one of the most challenging aspects of doing business within Asia. It's also a factor to consider when weighing up whether to recruit local talent or expats or a mix of both.

* Communication misunderstandings: simple things like saying it’s ‘a shame’ that a customer cannot attend an event may cause offence to that customer, as you’ve ‘shamed’ them.

* Discounting: Asian culture generally involves haggling so by nature discounts are the norm. Consider this point when setting your price – be prepared to react to customer enquiries and consider offering a 5 to 10% discount.

* Contracts: these can be seen as 'expressions of strong interest' rather than a ‘done deal’. This is especially problematic when making sales in India. Be sure to explore this when making larger sales.


I've had tremendous success with using LinkedIn as a marketing tool in Asia. I'd recommend thinking of LinkedIn as your bridge to Asia: a great platform to connect direct with customers and ask questions through a large number of dedicated groups, or simply to gauge interest. Over the last two years through efforts on LinkedIn, 6-10% of Asian event sales were generated by contacts connected via LinkedIn or notifications posted on the site.

Other pitfalls and opportunities include…

* Messaging: when using terminology like ‘holy grail’ be aware that the context may be common for you but could cause offence.

* Social media: apart from LinkedIn, other aspects of social media have proved difficult in Asia, due to cultural issues that make dialogue in a public forum difficult to create. Both China and Japan have their own sites for Facebook and LinkedIn – so those regions are particularly difficult to crack via social media.

* Language: keep it simple when marketing to customers who use English as their second language and resist the urge to over-complicate your offering.

* Use of images: I’ve heard of newsletter publishers making a point of using photos that include a diverse group of people rather than just westerners, to make sure they connect with people locally.

* Collateral: printing is generally significantly cheaper in Asia – usually about 25% less than the UK. Therefore brochure / catalogue production is low-risk.

Finally – the most common questions I hear…

Will customers in Asia buy my publications, newsletters or webcontent in English? Yes. And I suspect, quite a lot.